Senators are currently focusing their energies on getting S. 900, the Financial Services Modernization Act, out of a conference committee, so it can be sent to President Clinton for his review, she said.

Last Bill

The last SMEA bill was passed in 1997. Market reform proponents have flooded Banking Committee Chairman Sen. Phil Gramm (R-Texas), and members of the securities subcommittee, with wish-lists for additional legislative change.

One proposal of interest to market makers is the prohibition of Section 31 fees during low-volume trading sessions and non-traditional trading hours. The Securities Industry Association has submitted more than 70 other suggestions.

Gramm has already killed at least three SIA proposals he believed would have doomed a new SMEA bill. "It has been our goal from the beginning to produce legislation that enjoys wide support," he said in a prepared statement.

The three rejected suggestions are:

* A plan to end licensing of brokers by the states;

* A proposal to establish a single self-regulatory organization to oversee brokerage firms;

* A recommendation to forbid states from imposing broker or dealer registration requirements in addition to, or different from, those mandated by the Securities and Exchange Commission.

Many more of the SIA's suggestions concern loosening state involvement in the securities industry. One would prohibit state regulators from bringing "duplicative cases based on the same underlying conduct merely to extract a financial payment unrelated to investor protection."

Another suggestion would eliminate state filings of disciplinary actions as long as such records are "readily available to the state... through a national securities association" such as the SEC.

An official at the North American Securities Administrators Association (NASAA) has contended that the latter proposal could be quite controversial. "The SIA is essentially saying to states, Let the NASD run the [Central Registration Depository]'," the official was quoted as saying in an industry publication. The NASD offers only an abridged version of such records.

Other industry proposals still under Senate consideration include adding a statement of policy to the SEC's rulemaking and oversight responsibilities under the Securities Act of 1933.

That statement of policy would signal that competitive market forces be permitted to shape market structure and participant behavior without undue government involvement.

The statement would urge the national securities markets to foster responsibility and accountability by all market participants, including brokers, dealers, issuers, and investors for the regulation of the nation's bond markets.

Limitations

Another industry proposal would prohibit limitations by the National Association of Securities Dealers, other self-regulatory organizations, and the states, on dealer markups and profits from debt securities.

A spokesman at the securities subcommittee of the Senate Banking Committee said Gramms' staff is studying comment letters on the proposals. He will craft legislative language for a new SMEA bill from the patterns that emerge, the spokesman said. No hearings will be set until the bill is written.